Financial Results First Half 2011-2012 February 17, 2012 1
Disclaimer This presentation does not constitute or form part of and should not be construed as any offer for sale of or solicitation of any offer to buy any securities of Eutelsat Communications, nor should it, or any part of it, form the basis of or be relied on in connection with any contract or commitment whatsoever concerning Eutelsat Communications assets, activities or shares. This presentation includes only summary information related to the accounts and activities for the First half 2011-2012 of Eutelsat Communications and its strategy, and does not purport to be comprehensive or complete. For further details please refer to the consolidated accounts of Eutelsat Communications for the First half 2011-2012, available on the Eutelsat Communications website www.eutelsat.com. All statements other than historical facts included in this presentation, including without limitations, those regarding Eutelsat Communications position, business strategy, plans and objectives are forward-looking statements. The forward-looking statements included herein are for illustrative purposes only and are based on management s current views and assumptions. Such forward-looking statements involve known and unknown risks. For illustrative purposes only, such risks include but are not limited to: postponement of any ground or in-orbit investments and launches including but not limited to delays of future launches of satellites; impact of financial crisis on customers and suppliers; trends in Fixed Satellite Services markets; development of Digital Terrestrial Television and High Definition television; development of satellite broadband services; Eutelsat Communications ability to develop and market valueadded services and meet market demand; the effects of competing technologies developed and expected intense competition generally in our main markets; profitability of our expansion strategy; partial or total loss of a satellite at launch or in-orbit; supply conditions of satellites and launch systems; satellite or third-party launch failures affecting launch schedules of future satellites; litigation; our ability to establish and maintain strategic relationships in our major businesses; and the effect of future acquisitions and investments. Eutelsat Communications expressly disclaims any obligation or undertaking to update or revise any projections, forecasts or estimates contained in this presentation to reflect any change in events, conditions, assumptions or circumstances on which any such statements are based, unless so required by applicable law. These materials are supplied to you solely for your information and may not be copied or distributed to any other person (whether in or outside your organisation) or published, in whole or in part, for any purpose. 2
Agenda First half delivers solid results Sustained operational performance Financial overview Positive outlook: growth & profitability 3
First Half Delivers Solid Results Revenue 602.4 M, up 4.6% (6.0% at constant currency) EBITDA Strong profitability: EBITDA at 479 M Industry leading 79.4% margin Net result Group share of net income at 157 M 26% net margin Financial position Robust financial position, with Net Debt / EBITDA at 2.53x Refinancing achieved in December 2011 Distribution Dividend of 0.90 paid November 22 nd 2011 Payout ratio of 58% 4
Key Achievements in H1 2011-2012 Successful launches of ATLANTIC BIRD 7 and W3C and subsequent redeployments ATLANTIC BIRD 7 and W3C came into operation in Q2 2011-2012 at 7 West and 16 East respectively ATLANTIC BIRD 4A redeployed at 3 East and renamed E UTELSAT 3C W2M redeployed at 48 East and renamed EUTELSAT 48B High visibility provided by record backlog Backlog reached 5.3bn at 31 December 2011, ie. 4.6 years of revenues Refinancing of Eutelsat Communications Term Loan Refinancing finalised in December 2011 through 800 M new Term Loan and 200 M new Revolving Credit Facility, both with a 5-year tenor, at Eutelsat Communications level 800 M new 7-year bonds at Eutelsat S.A. Improved maturity profile and continued diversification of funding sources 5
Increased Free-Float Following Abertis Telecom Stake Disposal 25.6% Others & Public 59.0% 15.4% 6
Agenda First half delivers solid results Sustained operational performance Financial overview Positive outlook: growth & profitability 7
Record Backlog Providing Strong Visibility Backlog ( bn) + 467m since December 31, 2010 with ATLANTIC BIRD 7 and W3C entry into service 4.2 4.9 5.3 Weighted average residual life of contracts: 7.3 years Video 93 % 92 % 93 % H1 2009-10 H1 2010-11 H1 2011-12 Approximately 4.6 years of FY 2010-11 revenues The backlog represents future revenues from capacity lease agreements (including contracts for satellites not yet delivered). These capacity lease agreements can be for the entire operational life of the satellites. 8
New Capacity to Expand our Activity Operational transponders (in txp) Fill rate down to 76.1% +22.7% Most of the additional capacity is related to the new KA-SAT project or allocated to two recently opened orbital positions, 3 East and 48 East 801 1 653 Launches and redeployments towards the end of the reporting period Fill rate 90.4 % 76.1 % 2 Increased leased transponder capacity by 3.4% H1 2010-11 H1 2011-12 New capacity to support dynamic markets 1 Including KA-SAT 82 spotbeams 2 KA-SAT specific fill rate calculation: fill rate considered at 100% when 70% of the capacity is sold 9
First Half Growth in All Our Applications M +2.9% +2.9% VIDEO 67.7% DATA AND BROADBAND 403 392 H1 2010-11 H1 2011-12 M ++0.8% 0.8% 19.8% 117 118 H1 2010-11 H1 2011-12 M 12.5% MULTI-USAGE 10 +29.9% +29.9% 57 H1 2010-11 Expressed as percentage of turnover as of December 31, 2011 excluding "other and non recurring revenues" 74 H1 2011-12
Video: Strong Exposure to Growing Markets Consolidation of key orbital DTH slots with ATLANTIC BIRD 7 and W3C 10% increase in channels (+391) vs. H1 2010-11 4,173 TV channels (of which 283 HD, 7% penetration) TV channel expansion (including HD) is mainly driven by high growth markets which now account for 54% of channels on the fleet Revenues from Video ( M) 361 +8.5% 392 +2.9% 403 H1 2009-10 H1 2010-11 H1 2011-12 11
Data and Value Added Services Transition Data services Sustained demand in Africa, Central Asia, Middle East Interconnection of corporate networks, GSM backhaul, Internet trunking Value-added services Consumer (Tooway TM ) and entreprise Internet access Transition period for D-Star terminals Mobility: passenger Internet access on high-speed trains, Internet access for maritime markets Revenues for Data & VAS ( M) VAS Data 96 22 22 74 +21.2% 117 118 93 +0.8% 24 23 95 H1 2009-10 H1 2010-11 H1 2011-12 12
Multi-usage: An Exceptional H1 2011-2012 Multi-usage strong performance driven by previous year commercial dynamics and renewals Revenues from Multi-usage ( M) +29.9%1 1 Strong September 2011 renewals on W5, W6 & ATLANTIC BIRD 2 +29.1% 57 74 44 H1 2009-10 H1 2010-11 H1 2011-12 1 +34.6% at constant exchange rate 13
Agenda First half delivers solid results Sustained operational performance Financial overview Positive outlook: growth & profitability 14
Strong Net Margin Despite Non-Recurring Financial Charges Extracts from the consolidated income statement in M1 H1 2010-11 H1 2011-12 Change Revenues 576 602 +4.6% +6.0% at constant euro-dollar exchange rate EBITDA 2 463 479 +3.4% EBITDA margin 80.4% 79.4% Industry-leading EBITDA margin Operating income 320 326 +1.8% Higher depreciation (KA-SAT & new satellites) Financial result (54) (67) +25.1% One-off impact of partial hedge de-qualification Income from associates 11 5 Nm Non recurrence of 2010-2011 Hispasat tax credits Income tax (95) (99) +4.9% 5% increase in French corporate tax rate Non-controlling interests (8) (8) Ns Group share of net income 174 157-10.1% Net margin of 26% of revenues 1 Figures rounded to the M 2 EBITDA is defined as operating income before depreciation, amortization, impairments and other operating income/(expenses) 15
Industry Leading EBITDA Margin Maintained EBITDA ( M) Industry-leading, EBITDA margin of 79.4% +3.4% EBITDA margin» 412 81.0 % +12.5% 463 80.4 % 479 79.4 % Continued policy of strict operating costs control Operating expenses rose as resources were added to reinforce the Group s overall commercial activity, notably on Tooway TM and Kabelkiosk H1 2009-10 H1 2010-11 H1 2011-12 1 EBITDA is defined as operating income before depreciation, amortization, impairments and other operating income/(expenses) 16
Strong Net Cash Flows From Operating Activities M 371 333 316 226 227 242 % of revenues 62 % 45 % 64 % 39 % 55 % 40 % H1 2009-10 H1 2011-12 H1 2010-11 Net Cash flows from operating activities Capital expenditure 17
Continuous Strengthening of Group Financial Structure Net debt 1 ( M) 2,415 M 1,615 Term loan 2 2,380 M 800 Term Loan 2 Net debt / EBITDA at 2.53x (down from 2.75x at December 31, 2010) Average maturity: 5.1 years, taking into account the refinancing 3 Average cost of debt after hedging: 4.48% 132 981 Bonds + RCF 1,720 13 Bonds + RCF Other Refinancing of Eutelsat Communications 2006 Term Loan 181 Cash 154 Dec 31, 2010 Dec 31, 2011 Eutelsat Communications Eutelsat SA Cash Improved debt ratings S&P: BBB stable (December 2010) Moody s: Baa2 stable (October 2011) 1 Including liabilities from long-term lease agreements, overdraft and net of cash 2 Swap at 3.85% (purchased in 2006 and active from end April 2010 to June 2013) plus margin 18 3 Post funding of new bank facilities in Jan. 2012
Funding Diversification And Improved Maturity Profile Funding diversification towards more bond debt 1 December 31, 2009 December 31, 2010 December 31, 2011 1% 100% 33% 67% 65% 34% Bank debt Bonds Others Improved debt maturity profile Pre-refinancing ( M) Post-refinancing 2 ( M) 300 1,465 450 850 450 200 800 850 800 2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019 19 1 As a percentage of gross debt 2 Post funding of new bank facilities in Jan. 2012
Agenda First half delivers solid results Sustained operational performance Financial overview Positive outlook: growth & profitability 20
Eutelsat s Supply to Address Fast Growing Markets The 7 satellites entering into service during our outlook period, together with the redeployments, will add 20% additional capacity to support our growth prospects in high growth markets 3 year outlook period June 2011 June 2014 2011 2012 2013 2014 ATLANTIC BIRD 7(Q3 2011) 7 West 50 Txp Ku W3C (Q3 2011) 16 East 53 txp Ku, 3Ka W6A (Q4 2012) 21.5 East 40 txp Ku W5A (Q4 2012) 70 East 48 txp Ku EB2A (H1 2013) 25.5 East 16 txp Ku, 7Ka 1 W3D (Q1 2013) 7 East 53 txp Ku, 3 Ka Eutelsat 3B (H1 2014) 3 East 30 txp Ku, 9 Ka and 12 C Eutelsat 9B (H2 2014) 9 East Up to 60 txp Ku 1 Eutelsat share 21
Objectives Confirmed Revenue FY11 12: above 1,235 million 2011 2014: CAGR above 7% EBITDA FY11 12: above 955 million 2011 2014: EBITDA margin above 77% each year CAPEX 2011 2014: 550 million average per annum Distribution 50% to 75% of Group share of net income Net Debt EBITDA Below 3.5x Investment Grade rating objective 22
At Eutelsat, we Deliver Growth Growth driven by digital video and broadband services in markets with highest potential Profitability Consistently high profitability, highest among peers Reliability A company that has delivered on financial expectations year after year 23
24 Appendix
Eutelsat, one Group, one Name, one Fleet We are renaming our satellites from 1 March 2012 Satellites in orbit Current names ATLANTIC BIRD 1 ATLANTIC BIRD 2 ATLANTIC BIRD 7 ATLANTIC BIRD 3 EUTELSAT 3A EUTELSAT 3C (ex-atlantic BIRD 4A) EUROBIRD 4A W3A EUROBIRD 9A KA-SAT W2A HOT BIRD 6 HOT BIRD 8 HOT BIRD 9 W3C EUROBIRD 16 SESAT 1 W6 EUROBIRD 2 EUROBIRD 1 EUROBIRD 3 W4 W7 W48 W2M W5 25 New names from March 2012 EUTELSAT 12 West A EUTELSAT 8 West A EUTELSAT 7 West A EUTELSAT 5 West A EUTELSAT 3A EUTELSAT 3C EUTELSAT 4A EUTELSAT 7A EUTELSAT 9A EUTELSAT KA-SAT 9A EUTELSAT 10A EUTELSAT HOT BIRD 13A EUTELSAT HOT BIRD 13B EUTELSAT HOT BIRD 13C EUTELSAT 16A EUTELSAT 16B EUTELSAT 16C EUTELSAT 21A EUTELSAT 25A EUTELSAT 28A EUTELSAT 33A EUTELSAT 36A EUTELSAT 36B EUTELSAT 48A EUTELSAT 48B EUTELSAT 70A Future satellites W6A W5A EUROBIRD 2A W3D EUTELSAT 3B EUTELSAT 9B SESAT 2 TELECOM 2D TELSTAR 12 New names from 1 March 2012 EUTELSAT 21B EUTELSAT 70B EUTELSAT 25B EUTELSAT 7B EUTELSAT 3B EUTELSAT 9B Third-party satellites, no name change no change no change no change The Eutelsat satellite name change will be effective from 1 March 2012. All current satellite names will be used until then.